2015 (3) TMI 1406 - AT - Income Tax

Condonation of delay - sufficient cause of delay - delay around 8 years - CIT(A) refusing to condone the delay around 8 years in filing these appeals against the order passed by the Assessing Officer - HELD THAT - The assessee has to establish that there was no negligence or inaction and the right granted under law to challenge the order was not abandoned. It cannot be overlooked that on expiry of the period of limitation prescribed for seeking remedy, a corresponding right accrues in favour of the other party and the same should not be lightly interfered with. Coming to the facts of the present case, the assessee has to explain the period of delay by bringing the material on record to support the sufficient cause. The assessee has to show that the assessee is vigilant during this period and the delay was beyond his control. Condoning of inordinate delay of around 8 years should not frustrate the legitimate expectation of the other party as the Revenue would have come to the conclusion that the order of the Assessing Officer has been accepted by the assessee and reached finality especially the assessee should not take up the requisite legal remedies for such an inordinate length of time of 8 years. Considering the findings of the CIT(Appeals), since he has not examined actual circumstances which has prevented the assessee to file appeals against the orders of the Assessing Officer, we are not in a position to express any opinion about condoning of the delay. The ld. CIT (Appeals), who is required to examine whether the facts narrated by the assessee in his petition for condonation of delay as true or not which he failed to examine the same. Thus, in our opinion he is required to examine the contents, details in petition whether it is true or not. In our opinion, rule of limitation are not meant to destroy the right of the parties - The length of delay is not a material to condone the delay, the cause of delay is to be considered to condone the delay. We are inclined to hold that the Commissioner of Income Tax (Appeals) has to have necessary enquiry regarding averments made by the assessee in his affidavit and thereafter decide in accordance with law. - Appeal filled by assessee for statistical purposes.

Summary

Issues:
Delay in filing appeals before the Commissioner of Income Tax (Appeals) and the merits of the additions made by the Assessing Officer.

Delay in filing appeals:
The appeals by the assessee were against orders of the Commissioner of Income Tax (Appeals)-I, Madurai for various assessment years. The primary issue was the condonation of delay in filing these appeals. The assessee explained the delay citing mental depression, isolation, and lack of knowledge of assessment orders due to loss in business. The Commissioner of Income Tax (Appeals) dismissed the appeals as non-admitted, stating no reasonable cause for condonation of the 8 ½ years delay. The Tribunal observed that the assessee must establish no negligence or inaction and show that the delay was beyond their control. While the Tribunal acknowledged the legitimate expectation of the Revenue, it noted that the Commissioner of Income Tax (Appeals) did not examine the circumstances preventing the filing of appeals. The Tribunal emphasized the need for a detailed inquiry into the averments made by the assessee before deciding on condonation of delay. Consequently, the appeals were remitted back to the Commissioner of Income Tax (Appeals) for fresh adjudication, with a directive to provide the assessee with adequate hearing opportunities.

Merits of additions made by the Assessing Officer:
Apart from the delay issue, the assessee also contested the merits of the additions made by the Assessing Officer. The Tribunal did not delve into this ground as the primary focus was on the delay in filing the appeals. Therefore, no specific judgment was provided on the merits of the additions made by the Assessing Officer. The Tribunal solely addressed the delay issue and remitted the case back to the Commissioner of Income Tax (Appeals) for further examination.

In conclusion, the Tribunal allowed all eight appeals filed by the assessee for statistical purposes, emphasizing the need for a thorough inquiry into the delay issue by the Commissioner of Income Tax (Appeals) and providing the assessee with a fair opportunity to present their case.